Judge strips Endicott Interconnect of corporate jet

By
Dave Greber

May 13, 2013Updated May 14, 2013 at 11:41 AM EST

(WBNG Binghamton) In a court filing last month, former Endicott Interconnect CEO Jay McNamara told a federal judge if the company's private jet were taken away, and it lost a subsequent lawsuit, the result would likely be bankruptcy.

One of two occurred Thursday, when U.S. District Court Southern New York Division Judge Jed S. Rakoff ordered U.S. Marshalls to seize the Hawker 800 corporate jet, which is parked at Binghamton Regional Airport.

Canal Air LLC -- a subsidiary of General Electric -- is suing Endicott Interconnect because the Broome County employer missed a nearly $77,000 rent payment on the private jet Canal owns.

In a separate lawsuit, Canal is asking for $11.5 million because EI missed the payment. McNamara told the court a ruling for removal of the corporate jet would add prejudice to the subsequent $11.5 million lawsuit. The judge disagreed.

McNamara said last month in a letter to the court losing both lawsuits would cost the future of EI, and the company's now 605 jobs.

In his decision, Rakoff said the facts speak for themselves.

"The undisputed facts demonstrated beyond any doubt that Canal Air is entitled to the immediate return of its aircraft under the terms of the lease," he wrote.

The number of employees at EI -- and the company's financial health -- have been difficult to determine, despite repeated reports from current and former employees who have expressed concern over its shrinking workforce.

McNamara retired April 12, but among his final acts was penning a letter to defend his company's actions in its dealings with Canal Air.

"EIT has been involved, for months, in efforts to restructure its financing so as to produce a positive cash flow and to allow it to remain in business and to continue to employ its employees, currently numbering approximately 605," McNamara wrote in the letter dated April 8.

That's nearly 800 fewer than the 1,400 employees reported to Action News in 2010 by company officials.

EI is a private company, meaning such inter-working disclosures are rare. But it's also been boosted by tax dollars during its 10-year existence. The company has received millions of dollars from the state for job retention and creation.

Community leaders say they feel shut off as well. Officials from the town of Union and Broome County say communication from EI has been non-existent.

The $11.5 million lawsuit will proceed in New York's Southern District.